Twenty-one neonates with subependymal cysts detected by neurosonography soon after birth were prospectively examined. The clinical and cranial sonographic findings were evaluated with respect to short-term prognosis. The prognosis was poor in 6 patients with congenital viral infection (4 with cytomegalovirus infection and 2 with rubella infection). Five patients also had neurodevelopmental abnormalities (2 with neonatal epileptic seizures, 2 with chromosomal abnormalities, and 1 with lissencephaly). The remaining 10 patients had normal psychomotor development. The incidence of congenital viral infection was statistically correlated with a poor neurodevelopmental outcome. A correlation did not exist between the short-term prognosis and each of the other clinical factors or cranial sonographic findings. Our evidence suggests that further investigation of possible subependymal cyst etiologies is required during a careful, long-term follow-up period.